PREPARE (in pre Information to prepare adjusting journal entries The following information relates to Gatsby, Inc. as of December 31 of the current year. The company uses the calendar year as its annual reporting period and the Accrual Method of Accounting. Prepaid and unearned items are recorded as assets and liabilities, respectively. Prepare all necessary adjusting journal entries and post to the T-accounts. 1 The company's weekly payroll is $3,000 and is paid each Friday for a five-day work week. Assume December 31st falls on a Thursday, but the employees will not be paid their wages until Friday, January 3rd. 2 Eighteen months earlier, on July 1st the company purchased equipment that cost $160,000. Its useful life is predicted to be ten years, at which time the equipment is expected to have a zero salvage/residual value. Gatsby, Inc. uses the straight-line depreciation method. Deprecation has NOT been recorded for this year. 3 On September 1st of the current year Gatsby, Inc. was paid $60,000 in advance of future installation of alarm systems in 4 new homes. The amount was credited to the Unearned Revenue - Alarms account. Between September 1st and December 31st alarm systems were installed in 2 homes, completing those jobs. 4 On October 1st of the current year the company purchased a 12-month insurance policy for $12,000. The transaction was recorded with a debit to the Prepaid Insurance account. Insurance expense has not been recorded for October, November nor December. 5 On December 30 of the current year the company completed an $18,000 job that has not been billed/invoiced and therefore has not been recorded. 6 A $150,000 long-term note payable was signed on August 1st of the current year. It is a five-year note with a 8% interest rate. Interest expense as not been accrued for this year. 7 Supplies at the beginning of the current year had a balance of $ 500. Supplies valued at $2,800 were purchased thoughout the year. The current balance in the account is $200. 8 Depreciation on the building is calculated using the straight-line depreciation method. Gatsby estimates depreciation on the building over a 25 year period and a zero salvage/residual value